Why Loan Comparison Matters

The difference between a 6% and 10% loan on $30,000 over 5 years is $4,200 in total interest — more than 65% higher cost. Comparing loans helps you identify the lowest-cost option and understand the true cost beyond monthly payment.

Key Metrics to Compare

• APR (Annual Percentage Rate): Includes interest and all fees, the true cost of borrowing
• Term length: Longer terms = lower payments but more total interest
• Total interest paid: The sum of all interest over the loan term
• Prepayment penalties: Some loans charge fees for early payoff

Break-Even Analysis

Lower rates with longer terms aren't always better. Compare total dollars paid (monthly payment × number of months) to find the best balance between affordability and total interest cost.